The Rev. Jesse L. Jackson presented a powerful defense of the Community Reinvestment Act on Wednesday, blasting Senate Banking Committee Chairman Phil Gramm and the American Bankers Association for trying to weaken the 1977 law.

"The Community Reinvestment Act is to economic justice what Brown v. Board of Education is to public accommodations," the civil rights leader said at a community development conference co-sponsored by the ABA and the Federal Housing Finance Board.

"I will fight with every last ounce of energy I have to preserve the CRA," he said, describing Sen. Gramm's position as the economic equivalent of George Wallace's blocking black students from entering Alabama public schools. "I will battle those who wish to undo it or weaken it. I will go to the mat on this one."

But on Wednesday, Sen. Gramm picked up a potent ally as presidential candidate George W. Bush backed his fellow Texas Republican.

"Gov. Bush supports the Community Reinvestment Act, which has helped provide access to credit to many historically underserved communities and their residents," according to a policy statement released Wednesday by the Bush campaign.

"However, the law is not perfect and needs to be reformed. Sen. Gramm has proposed some reasonable reforms, including helping small banks that are overly burdened by the current CRA requirements and requiring public disclosure of all CRA deals between banks and community development groups."

Community activists and Department of Housing and Urban Development officials called for tougher enforcement laws after releasing studies Wednesday showing that mortgage lenders continue to discriminate against minority borrowers.

"The report makes it clear that Congress should be looking at strengthening CRA, not weakening it," said Maude Hurd, president of the Association of Community Organizations for Reform Now. An Acorn study of 41 lenders across the country has concluded that blacks are twice as likely as whites to be rejected for conventional loans, and that refinanced mortgages increased 162% for whites last year but 85% for blacks and 136% for Latinos.

When minorities do get a mortgage, they tend to get worse terms on the loan, according to the report commissioned by HUD. In most of the cities surveyed, "minorities were less likely to receive information about loan products, received less time and information from loan officers, and were quoted higher interest rates," it found.

Rev. Jackson, speaking about the CRA for the second time this year, toughened his anti-Gramm rhetoric since his last speech in April. And his remarks Wednesday were distinctive in directly criticizing his host, the ABA, for supporting Sen. Gramm.

"It's got to be a little dysfunctional sponsoring a conference on community development while calling for a rollback in the very piece of legislation that has breathed new life into community banking efforts," he said. "You shouldn't be able to have it both ways. A commitment to economic and community development requires a commitment to the CRA."

Rev. Jackson pointed to a letter that ABA president R. Scott Jones sent the Senate this spring. It endorsed two changes to the CRA sought by Sen. Gramm in the pending financial reform bill: preemption of rural banks with less than $100 million of assets, and a requirement that protesters must present substantial evidence to block the merger of a bank that has earned a "satisfactory" or better CRA rating for three consecutive years.

Judith Knight, director of the ABA's Center for Community Development, defended the group's position by saying small banks which represent a tiny portion of industry assets must serve their entire communities in order to survive, and that CRA red tape only hinders them.

"By exempting rural banks with assets less than $100 million, we would free up the tools and resources community banks need to broaden their lending practices," Ms. Knight said in a statement. "We also believe that banks that receive satisfactory or higher ratings under CRA should be able to proceed with normal business practices."

A spokeswoman for Sen. Gramm said Rev. Jackson "completely misrepresents" the lawmaker's comments and positions.

Rev. Jackson accused Sen. Gramm of overstating the default rate on CRA loans and understating the number of banks failing to comply with the law. Noting that less than 1% of mergers have been protested, Rev. Jackson also said that the Texas lawmaker has exaggerated the ability of community groups to extract donations by threatening to hold up deals.

But Sen. Gramm's spokeswoman disputed the figures offered by Rev. Jackson and said the threat of blackmail alone is enough "to make banks cough up money."

Katharine Fraser contributed to this article

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